Question
Boston Railroad decided to use the high-low method and operating data from the past six months to estimate the fixed and variable components of transportation
Boston Railroad decided to use the high-low method and operating data from the past six months to estimate the fixed and variable components of transportation costs. The activity base used by Boston Railroad is a measure of railroad operating activity, termed "gross-ton miles," which is the total number of tons multiplied by the miles moved.
Transportation Costs Gross-Ton Miles
January $1,053,200 312,000
February 1,174,300 349,000
March 829,900 226,000
April 1,125,900 338,000
May 944,300 272,000
June 1,210,600 367,000
Determine the variable cost per gross-ton mile and the total fixed cost.
Variable cost (Round to two decimal places.) $ per gross-ton mile
Total fixed cost $
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